DELTA Corporation’s FY26 financial results delivered one of the strongest volume-led performances in the group’s recent history, highlighting resilient consumer demand despite policy challenges, regional execution pressures and rising competition.
Group revenue crossed the US$1 billion mark for the first time, increasing 35% year-on-year to US$1,09 billion, supported by record volumes across lager beer, sorghum beer (Zim), non-alcoholic beverages, wines and spirits. Operating profit increased 37% to US$208,7 million, while attributable earnings rose 64% to US$164,2 million (using effective tax rate of 25%).
Lager beer continues to dominate earnings and cash generation, while non-alcoholic beverages remain under pressure from sugar tax and intensified competition.
US dollar revenue contribution increased to 94% in FY26 from 90% in HY26 and about 80% in FY25, reflecting the growing dominance of foreign currency transactions.
Lager beers drive earnings
Lager beer contributed roughly 39% of FY26 revenue and more than 70% of operating profit. Revenue increased 20% to US$421,7 million, driven primarily by a 19% rise in volumes to a record 315,3 million litres, while pricing remained broadly stable.
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Demand has now outpaced installed production capacity. Management confirmed that Delta supplemented local supply through imports from AB InBev operations, highlighting demand has outpaced installed production infrastructure.
This capacity pressure underpins the group’s aggressive capital expenditure programme. Delta is investing behind lager demand through new brew house, expanding the malting capacity, contract farming and returnable glass infrastructure expected to come on stream during Q3 FY27.
The investment is strategically important following Varun Beverages Zimbabwe’s partnership with Carlsberg, which is expected to intensify competition within the clear beer category.
The segment also recorded a significant profitability improvement. Operating profit increased 35% to US$150 million, while operating margins expanded to 36% from 32% in FY25.
Sorghum beer anchored by Zim
The sorghum beer business delivered a recovery in FY26, with overall volumes increasing 10% to 664 million litres and revenue rising 20% to US$274,4 million. The segment contributed approximately 25% of group revenue.
Zimbabwe remained the anchor market within the portfolio. Volumes surged 19% to 462 million litres, benefiting from improved grain availability, stronger agricultural incomes and lower raw material pressure following improved rainfall patterns.
South Africa recorded only marginal growth, with volumes increasing 6% to 143 million litres.
Zambia, however, remained under pressure, with volumes declining 27% to 59,4 million litres following prolonged electricity shortages and elevated alternative energy costs.
Despite these challenges, management remains committed to Zambia given its attractive long-term production economics relative to Zimbabwe once power stability normalises.
Exiting the market would weaken Delta’s regional footprint and potentially cede market share to competitors.
The segment nonetheless recorded a strong profitability recovery. Operating profit increased to US$31,7 million from US$7,4 million in FY25, while operating margins improved to 12% from 3%.
Non-alcoholic beverages volumes surge amid margin pressure
The non-alcoholic beverages segment recorded the strongest volume growth within the portfolio, with volumes surging 63% to 341,6 million litres following the integration of Schweppes Holdings Africa Zimbabwe into the group’s financials.
Revenue increased 82% to US$302,5 million, making the segment the second-largest contributor to group revenue at roughly 28%.
Growth was driven by sparkling beverages, the integration of cordials and juices under Schweppes, and strong growth in alternative beverages, particularly Shumba Maheu, benefiting from affordability and wider distribution.
However, profitability deteriorated sharply. Operating margins declined to 2% from 8% in FY25, while operating profit fell 47% to US$7 million despite substantial growth in revenue and volumes.
The pressure reflects the cumulative impact of sugar tax, rising competition from lower-priced imports and Delta’s decision to absorb part of the tax burden on key products to preserve affordability.
Afdis continues strong recovery
Wines and spirits, operated through Afdis, remained one of the group’s strongest-performing segments.
Volumes increased 50% to 27,8 million litres, while revenue rose 56% to US$93,2 million.
The segment contributed roughly 9% of group revenue. Operating profit more than doubled to US$12,2 million from US$5,6 million in FY25, while operating margins improved to 13% from 9%.
Growth was supported by improved product availability, stronger competitiveness against illicit alcohol alternatives and continued traction within ready-to-drink beverages.
Nampak strategic restructuring
Delta also flagged strategic developments at its associate company, Nampak Zimbabwe. Management confirmed ongoing merger and acquisition processes involving its major shareholder following unsuccessful recapitalisation efforts over recent years.
The process is expected to support fresh capital injection, operational recovery and competitiveness restoration through targeted investment.
The development remains strategically important given Nampak’s role within Delta’s packaging supply chain.
Balance sheet strength, dividends
Delta’s balance sheet strengthened materially during FY26. Total assets increased 32% because of higher inventory holdings, strategic capex deployment (PPE) and increased trade receivables.
Total equity increased 37% to US$394,3 million, as operating cash flows rose 64% to US$162 million.
Management outlined a capital expenditure programme of approximately US$120 million focused on lager beer expansion, packaging infrastructure, returnable glass assets, fleet upgrades and productivity enhancement projects.
Delta also maintained a strong shareholder return profile.
The group declared a final dividend of US$0,03 per share following an interim dividend of US$0,02 per share declared at half year, bringing total FY26 dividends to US$0,05 per share, representing a 52% increase from FY25.
Based on Delta’s closing VWAP of US$0,9369 and an exchange rate of 30, the counter is trading on an implied dividend yield of approximately 5,34%.
- Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.